Crude Oil Rate in India Today

 Crude Oil Historical Prices

Price of Crude Oil for the Last 10 days

MCX Price of Crude Oil

The MCX Price of crude oil India as reported on 5 May 2023 is Rs.5,857 for each barrel. Depending on the change in global price of the crude oil, its rate in India will also be affected. The MCX Price of Crude Oil on 8 May is Rs.5,929.

Classification of Crude Oil

Crude Oil has been classified into four categories. This was done to avoid confusion for the investors while investing in crude oil. The classifications are given below:

1. Class A - The Class A crude oil that is traded in real time includes refined crude oil and its premium and light products. Class A crude oil is an example of a very fluid oil that spreads quickly on water or solid surfaces, has a strong scent, is easily combustible, and has a high evaporation rate.
   
2. Class B - Class B crude oil and its associated products are less hazardous than Class A crude oil and are greasy and waxy in texture. Class B oils are more water and surface-adhesive than Class A oils. Class B oils have substantial paraffin content and can easily enter porous materials when heated.
3. Class C - Class C oils have characteristics like viscosity, stickiness, dryness, and a brown or black colour. Due to its similar density to water, this sort of oil tends to sink. These oils do not penetrate porous surfaces as readily as other oils found in Classes A and B.
   
4. Class D - Class D oils are comparatively non-toxic and are dark brown or black in colour. When melted, these oils can coat surfaces but won't penetrate porous materials. Heavy crude oils, leftover oils, and some aged oils fall under the Class D classification.

Types of Crude Oil

There are different types of crude oil that you must know about:

• Brent Crude Oil - The price of various forms of crude oil is frequently compared to that of Brent crude oil, which is produced in the North Sea. It has a low sulphur concentration and is light and pleasant.
• West Texas Intermediate (WTI) crude oil - Crude oil known as West Texas Intermediate (WTI) is produced mostly in Texas in the United States and serves as a benchmark for the cost of other varieties of crude oil. Additionally, it has a low sulphur content and is light and sweet.
• Dubai Crude Oil - This Middle Eastern-produced crude oil serves as a benchmark for crude oil pricing in Asia. It contains more sulphur and is heavier than Brent and WTI crude oil.
• Bonny Light Crude Oil - It is easy to refine this type of crude oil from Nigeria into high-quality petrol and diesel fuel due to its low sulphur level and high API gravity. 
• Venezuelan Crude oil: Due to its heavy viscosity and high sulphur content, this type of crude oil, which is produced in Venezuela, is challenging to refine into high-quality fuels.
• Canadian Crude oil - Similar to crude oil from Venezuela, this kind of crude oil is made in Canada and is distinguished by its thick viscosity and high sulphur content.
• Russian Urals Crude oil - Russian producers export this kind of crude oil to Europe. Similar in composition to crude oil from Venezuela and Canada, it is a heavy, sour crude.

Factors that Affect the Price of Crude Oil

We will look into details the factors that affect the price of crude oil globally:

• Quality - The quality of the oil has an effect on the price of crude oil because it is used to set prices in the futures market and when buying crude oil from other countries. The grade of the crude oil increases with ease of refinement and compliance with environmental requirements. Sweet Crude, the priciest crude oil, is higher quality than lower-grade crude and thus more expensive.
• Demand - Investors evaluate the current crude oil prices by taking into account the global demand for crude oil. The main users of crude oil are the USA, Europe, and China. The strength of these countries' economies and international demand, notably that from India, affect the price of crude oil.
• Supply - Although not all nations produce crude oil, they all import it from nations with substantial reserves. However, OPEC controls the flow of crude oil from these nations with substantial oil reserves to other nations. The price of crude oil is significantly impacted if the supply of crude oil is lower than the demand in any given country or vice versa.
• Derivative Trading - Instead of directly exchanging crude oil, market players do so via futures and options. While speculators use crude oil contracts to profit from price fluctuations, hedgers use derivatives to protect themselves from a decline in crude oil prices. Based on the trading volume, these futures also have an impact on the price of crude oil today and every day.

Features of Crude Oil

Some of the features of crude oil are given below:

Crude oil generates heat. It is possible to sustain current living standards even in arctic regions by heating this material and other petroleum-based products. This oil also produces energy. Petroleum is used to make a variety of energy carriers. The energy released during combustion can be used to make fuels such as petrol, diesel, and jet fuel.

Petroleum is a key component in many goods, including paint, shampoo, and detergent. This object also makes it possible to produce modern furniture. The production of a standard modern sofa uses about 16 gallons of crude oil. Crude is also a key ingredient in the production of contemporary apparel, with 40% of fabrics now used containing some type of petroleum waste.

This product allows machinery to move by providing the lubrication oil required for modern industrial equipment to operate properly. Crude is also used to make the asphalt that is used in cars and trucks. Asphalt is easier to lay than concrete, hence concrete is typically more cheap.

How are the Rates of Crude Oil Determined?

The following factors determine the rates of Crude Oil globally:

1. Current Supply - The current supply of oil is the entire world's output. OPEC produces over 40% of the world's crude oil, which significantly affects the price of oil on a global scale. The current supply has improved due to an exponential rise in US shale oil production, which has a significant impact on the price of crude oil.
2. Future Supply - Oil reserves determine how future supplies can be accessed. It includes the supplies found in American refineries and the Strategic Petroleum Reserves. Based on criteria in the Energy Policy and Conservation Act of 1975, these reserves can be easily accessible to augment the oil supply if prices grow too high, if natural disasters impede the flow of oil into the U.S., or if there is another need for oil.

1. Demand - Traders consider global oil demand, particularly that from China and the United States. The Energy Information Agency releases monthly estimates for the United States. The summer driving season sees an increase in petrol usage, whereas winter sees a decrease. In order to forecast demand, AAA travel forecasts are utilised in the summer to determine prospective petrol use, while weather forecasts are employed in the winter.

How can I Invest in Crude Oil?

The primary approach to trade crude oil electronically is by opening a derivatives account through a broker. Oil and other commodities are listed and traded on the Multi Commodity Exchange (MCX). The price of mcx crude oil determines the commodity's quote. They are traded using futures contracts, which provide you with the option to exercise the contract at a set price and time.

Crude oil is listed there and is often traded in volumes of 100 barrels or greater based on the MCX crude oil pricing. 100-barrel, 200-barrel, 300 barrels, and 400-barrel increments are the possible order sizes. To buy or sell crude oil, you must make an order through your derivatives account. You can accomplish this by visiting the MCX FO. You must settle the futures contract after placing an order before the designated expiration date.

You can also buy crude oil through an Exchange Traded Fund. Investments will be made in companies that are engaged in the extraction, refining, and production of crude oil through an oil Exchange Traded Fund. You can also invest on your own in the equities of oil companies that are traded on different stock exchanges, such as the NSE or BSE.